While the phonemic inventory of Palauan is relatively small, comparatively, many phonemes contain at least two allophones that surface as the result of various phonological processes within the language. The full phonetic inventory of consonants is given below in IPA (the phonemic inventory of vowels, above, is complete).

The extent to which it is accurate to characterize each of these vowel sequences as diphthongs has been a matter of debate, as in Wilson 1972, Flora 1974, Josephs 1975, and Zuraw 2003. Nevertheless, a number of the sequences above, such as /ui/, clearly behave as diphthongs given their interaction with other aspects of Palauan phonology like stress shift and vowel reduction. Others do not behave as clearly like monosyllabic diphthongs.

In the early 1970s, the Palau Orthography Committee worked with linguists from the University of Hawaii to devise an alphabet based on the Latin script.[6] The resulting orthography was largely based on the "one phoneme/one symbol" notion, producing an alphabet of twelve native consonants, six consonants for use in loan words, and ten vowels. The 20 vowel sequences listed under Diphthongs are also all officially recognized in the orthography.

Most of the letters/graphemes in written Palauan correspond to phonemes that can be represented by the corresponding segments in the International Phonetic Alphabet (Nuger 2016:308), e.g., Palauan b is the phoneme /b/. Three notable exceptions are worth mentioning. The first is ch, which is invariably pronounced as a glottal stop [ʔ]. The chdigraph is a remnant of an earlier writing system developed during German occupation when the glottal stop was pronounced as a fricative [x]. Some older Palauans still remember their grandparents pronouncing ch this way. In modern Palauan usage the sound [x] has been completely replaced by [ʔ], but the ch spelling persists. The second is e, which represents either the full vowel [ɛ] in primary and secondary stressed syllables, or a schwa [ə] in unstressed syllables; the conditions are similar to those of English vowel reduction (and note that stress in Palauan is largely penultimate, with many semi-regular exceptions). The third is the digraphng, which is a (phonemic) velar nasal /ŋ/ but can assimilate to be pronounced as [m] or [n]. There is no phonemic /n/ in Palauan.

On May 10, 2007, the Palauan Senate passed Bill No. 7-79, which mandates that educational institutions recognize the Palauan orthography laid out in Josephs 1997 and Josephs 1999. The bill also establishes an Orthography Commission to maintain the language as it develops as well as to oversee and regulate any additions or modifications to the current official orthography.

Palauan nouns inflect based on humanness and number via the plural prefix re-, which attaches to plural human nouns (see Josephs 1975:43). For example, the word chad "person" is a human noun that is unambiguously singular, whereas the noun rechad people is a human noun that is unambiguously plural. Non-human nouns do not display this distinction, e.g., the word for stone, bad, can denote either a singular "stone" or multiple "stones."[7]

Some possessed nouns in Palauan also inflect to agree with the person, number, and humanness of their possessors. For example, the unpossessed noun tebel means simply "table," whereas one of its possessed forms tebelek means "my table." Possessor agreement is always registered via the addition of a suffix to the noun (also triggering a shift in stress to the suffix). The possessor agreement suffixes have many different irregular forms that only attach to particular nouns, and they must be memorized on a noun-by-noun basis (Josephs 1997:96). However, there is a "default" set (see Josephs 1997:93 and Nuger 2016:28), shown below:

In the preceding example, the null pronoun pro is the subject "I," while the clause-initial ak is the first person singular subject agreement morpheme.

On the other hand, those who have analyzed Palauan as SVO necessarily reject the pro-drop analysis, instead analyzing the subject agreement morphemes as subject pronouns. In the preceding example, SVO-advocates assume that there is no pro and that the morpheme ak is simply an overt subject pronoun meaning "I." One potential problem with this analysis is that it fails to explain why overt (3rd person) subjects occur clause-finally in the presence of a co-referring 3rd person "subject pronoun" --- treating the subject pronouns as agreement morphemes circumvents this weakness. Consider the following example.

Proponents of the SVO analysis must assume a shifting of the subject a Alan "Alan" from clause-initial to clause-final position, a movement operation that has not received acceptance cross-linguistically, but see Josephs 1975 for discussion.

Palauans have different numbers for different objects. For example, to count people it is: tang, terung, tedei, teuang, teim, telolem, teuid, teai, tetiu, and teruich. Traditionally, there were separate counting sets for people, things, counting, ordinals, bunches of bananas, units of time, long objects, and rafts; however, several of these are no longer used.[10]

^The figure used here, for all countries, is from Ethnologue. According to the 2005 Palau Census, there are 18,544 people aged 5 years or older residing in the Republic of Palau, of whom 4,718 do not speak Palauan. There are thus an estimated 13,826 Palauan speakers in Palau as of 2005; the UNSD estimated 12,400 in Palau in 2008. This number does not include native Palauan speakers residing outside of Palau, who probably comprise several thousand additional speakers (4,000 according to Ethnologue). (See Nuger 2016:13.)

^Katakana is no longer widely used, since the orthography based on Latin script has received official status and is taught in schools. But see Matsumoto 2001:90.

^Only 5 vowel phonemes are listed in Wilson 1972 because she avoids the issue of how to treat indeterminate underlying vowels. The vowel chart here tentatively reflects the analysis of Flora (1974), who treats indeterminate vowels as instances of underlying ə. Furthermore, the analysis of Palauan [w] in Flora 1974 treats it as a phoneme distinct from /u/, while [w] is merely an allophone of /u/ according to Wilson (1972). The consonant chart tentatively reflects Wilson's analysis.

^Note that some non-human animate plural nouns (animals) can stylistically inflect with the plural prefix re- if they are considered to be "sufficiently human" in some contexts, such as when talking about household pets that are like family members, or when anthropomorphized animal characters are described in stories. See Nuger 2016:172, fn. 9.

Zobel, Erik (2002), "The position of Chamorro and Palauan in the Austronesian family tree: Evidence from verb morphosyntax", in Fay Wouk; Malcolm Ross, The history and typology of Western Austronesian voice systems, Canberra: Pacific Linguistics #518, pp. 405–434.